Wall Street was closed today as Hurricane Sandy began to pummel the East Coast of the US. Markets may remain closed tomorrow as well, according to the Securities and Exchange Commission. The storm is expected to wreak havoc for millions of people.

Futures on the Dow Jones Industrial Average, the Standard & Poor's 500 Index and the Nasdaq Composite Index all declined.

In Europe, the Stoxx 600 Index ended the session with a 0.4 per cent drop from the previous close. National benchmark stock indexes also fell in the UK, France and Germany, Spain and Greece.

Shares of insurance companies paced declines amid concern about the cost of paying out damages sustained as a result of the storm, which may cause as much as US$20 billion in economic damages, according to a Bloomberg report.

One bright spot was UBS. Shares in the Swiss firm surged 7.3 per cent to 13.12 Swiss francs amid reports the lender intends to announce a fresh-and deeper-wave of job cuts as early as this week when it reports its latest quarterly results.

Britain's Pearson and Germany's Bertelsmann agreed to merge their respective Penguin and Random House businesses to create the largest book publisher in the UK and the US.

US Treasuries rose in morning trading, pushing yields on the 10-year bond 3 basis points lower to 1.72 per cent, before the Securities Industry and Financial Markets Association recommended trading in US dollar-denominated fixed-income securities end at noon in New York because of Sandy, according to Bloomberg. Bond trading also is likely to be closed tomorrow.

Even without the storm, market sentiment has taken a hit recently.

"Risk aversion is rising in all markets, and investors are increasingly focusing on slow global economic growth," Eugen Weinberg, head of commodities research at Germany's Commerzbank in Frankfurt, told Reuters.

A bright note on the world's largest economy got lost in concern about the cost of restoring the damage the hurricane will inflict.

A Commerce Department report today showed that American consumer household purchases increased a better-than-expected 0.8 per cent in September, after an unrevised 0.5 per cent advance in August. The gain was the highest since February. Incomes rose 0.4 per cent last month.

"The jumping off point, or the base point, is already pretty high. You have a lot of momentum going into the fourth quarter," Ellen Zentner, a senior US economist at Nomura Securities in New York, told Reuters.